Udenna Corp., led by Davao-based businessman Dennis A. Uy, prefers not to have any new players getting on board the Malampaya natural gas project and is looking at acquiring Shell’s 45-percent stake in tandem with PNOC Exploration Corp. (PNOC-EC)
“The Udenna Group firmly believes that Malampaya is a high-quality asset, strategic to the future welfare and energy security of the country and welcome our partner (PNOC-EC) to join us in taking over the field on a 100-percent basis,” Udenna spokesperson Raymond Zorrilla said in a statement.
The oil giant, through Shell Philippines Exploration BV (Spex), is operator of the Malampaya project. Since the discovery of natural gas in offshore Palawan in the early 1990s, the project has since provided fuel to several power plants that together account for one-fifth of electricity demand in the Philippines.
But Spex last week confirmed plans to divest from Malampaya “as part of an ongoing portfolio rationalization to simplify and increase the resilience [of Shell’s] business.”
“Should Shell not consider their existing partners but put forth a decision to sell its stake to another third party, Udenna will rely on its rights as stipulated in the agreement and as a member of the consortium, such as our preemptive and consent rights,” Zorrilla said.
Udenna completed in March the acquisition of Chevron’s 45-percent stake.
PNOC-EC, representing the government, owns the remaining 10 percent. PNOC president Reuben Lista said they were studying whether or not to vie for Shell’s 45-percent.
Last week, San Miguel Corp. president Ramon S. Ang said his group—which has subsidiaries and assets in the power generation business—was interested in acquiring Shell’s interest in Malampaya.
Zorrilla said there were complicated issues that a potential new consortium member would need to evaluate. He said this process would take time and it could be difficult for anyone other than the existing partners—Shell, Udenna and PNOC—to assess the outcome of these matters in a timely manner.
The lawyer added that, for Udenna, the exit of Shell from the Malampaya gas field would not in any way impact operations.
Zorrilla said Udenna wanted to work with PNOC-EC toward ensuring that the Malampaya assets would continue to operate reliably and safely.
“The transfer of Shell’s interest in Malampaya needs to be resolved as soon as possible, with the remaining consortium members as the logical choice to acquire the Shell stake,” he said.
He said a quick resolution would ensure continued employment and certainty among the local workforce as well as businesses and consumers who rely on Malampaya.